6 Tips for Protecting Your Family’s Finances

Protecting your family through financially difficult times can be stressful, which is why it’s best to put the proper protection in place ahead of time. You don’t want to wait until it’s too late and you’re left putting the pieces back together. Instead, be proactive about your family’s financial future and start protecting them today. 

1. Keep Track of Your Credit Card Balances.

Carrying high credit card balances not only hurts your credit but could put you at risk of going into more debt if you can no longer pay your credit card minimum each month. Typically, it’s best to keep credit card balances between 15 and 30 percent of your overall balance. Creditors like to see that you can handle credit responsibly and if you’re ever in a bind and need credit quickly, it’s nice to know that your score is intact and that you’ll be able to take care of your family.

2. Invest in Life Insurance.

In the event that something happens to you or your spouse, you’ll want to know that your children are taken care of. While it’s not pleasant to think about, life insurance can protect your family’s finances if your family loses an income or the primary caregiver (such as a stay-at-home mom). Life insurance can be a safety net during difficult times and you can even add riders that allow you to benefit prior to death, such as a child protection rider, disability income rider (in the event that you or your husband become disabled and are no longer able to work), or a guaranteed insurability rider, to name a few. Do some research to determine which riders are best for your family’s financial situation. Accidental death insurance is a popular life insurance rider.

3. Protect Your Debit and Credit Cards.

With advancements in technology come more advanced hackers. The electronic RFID chip inserted inside of most new debit and credit cards was invented to boost security, but hackers have gotten more sophisticated in their approach and now have RFID chip readers, which allow them to simply walk by their targets and collect sensitive financial data. You can protect your debit and credit cards by getting RFID safe cardholders to prevent electronic access to your money while you’re on the go.

4. Create a Spending Account.

In “Secrets of the Millionaire Mind,” T. Harv Eker recommends setting aside 10 percent of your income and placing it into an account for long-term spending. The idea is that you need balance; by putting the same amount aside that you do for savings and investments towards spending, you balance saving and budgeting with spending. We all have that urge to splurge every once in a while and this account will allow you to indulge without getting off track from your family’s financial goals.

5. Get Identity Theft Protection.

Cybercrime is on the rise and hackers aren’t just targeting corporations and small businesses. They’re targeting individual people, too, which means if you’re not protecting yourself, you’re leaving yourself wide open to a potential attack. Identity theft is a serious threat nowadays, and it’s advisable that you get some sort of protection in place that can alert you to unusual activity.

6. Create an Emergency Fund.

Creating an emergency fund in case of a financial crisis is one of the smartest things you can do to protect your family’s finances. Instead of going into debt to replace the broken water heater or get your car’s head gasket replaced, you’ll simply dip into your emergency savings, purchase the parts you need and pay for the replacement. Remember to always replenish the money you take from your emergency savings so that you’ll have it the next time an emergency arises.

Getting your family’s finances in order doesn’t have to be a headache. With the above tips in mind, you can create financial stability for yourself and your family fairly quickly and easily.

 

Posted on by Crystal in MommiFried Extras

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